Eurostat: Real unemployment double than the official rate

Eurostat, the EU statistical service, revealed that the true unemployment rate in Eurozone during the third quarter of 2013 was much higher than the ‘officially’ recognised percentage of 11.5%, according to the definition of UN’s International Labour Organisation. Including the three forms of de facto but not recognised by the ILO unemployment definition or “halos around unemployment” as Eurostat calls it, the people without a job in Q3 of 2013 were 21.2% of the labour force. This is almost the double than the official rate.

Those three forms of real but not ‘officially recognised’ unemployment are the following: underemployed part-time workers, jobless persons seeking a job but not immediately available for work and jobless persons available for work but not seeking it. No need to mention that the youths of 15-24 years of age are mostly hit by the last two forms of unemployment. In the first category that is the unemployed part-time workers, people of 35-44 years of age are mostly hit. The predominance of women is strongest in the group of unemployed part-timers. According to Eurostat “two thirds of them are women (66.7 %) in the EU-28 in 2012 ; 6.1 million women compared with 3.1 million men “.

It’s unbelievable how much larger is the truly unemployed part of the labour force in the south Eurozone countries, which are particularly hit by the economic crisis and the subsequent severe austerity measures, imposed on them by Brussels and Berlin. In Spain, with the officially recognised unemployment rate at 26% one has to add another 6.4% of underemployed part-time workers, plus 5.1% of people not seeking a job but available for work and another 1% of seeking but not available. That makes a total of a killing 38.5% of the labour force without labour. In Greece with the official rate at 27%, the unemployed part-timers are another 4.3%, plus 1.9% of persons available but tired of seeking and 0.7% of seeking but not immediately available. That makes a total of 33.9%.

Unofficially unemployed

A quick observation is that those ‘unofficial’ but quite real forms of unemployment may completely change the image and the comparison between countries. Spain, with the 38.5% of the working population without productive employment compares negatively to Greece where the relevant figure is 33.9%. Despite the fact that official unemployment in Spain is one percentage point lower than the corresponding figure for Greece.

It is also of importance to mention that countries like Germany with ostensibly very low official unemployment percentages are not spared from real unemployment. In the case of Germany, where the official unemployment is only 5.2%, there is another, almost equally important percentage of unemployed part-timers of 4.1% of the labour force, plus 1.3% of seeking but not available and another 1.3% of people available but not seeking for employment. Add those four percentages and you arrive at 11.9%, which is a quite important part of the labour force.

The same is true for Britain. Staring with a rather low percentage of official unemployment at 7.7%, one has to add an important percentage of part-timers without a job at 6% of the labour force, plus the available but not seeking at 2.5% and the seeking but unavailable at 1.1%. All those percentages make a full 17.3% of people without a job. Again, as in the case of Germany, the real unemployment percentage is much higher than the official rate.

More unemployed part-timers

This discrepancy between real and official unemployment seems to be proportionally higher in the more advanced economies than in the south of Eurozone. The reason is that more people are taking up part-time jobs in the north of Europe, than in the more traditionally structured societies of the south. Given that the part-time jobs are more insecure and that advanced economies tend to offer analogically more such jobs than the south of Europe, north EU countries are facing larger percentages of unemployed part-timers. In both Germany and Britain official unemployment tends to be almost equal to part-time unemployment.

In any case those ‘unofficial’ forms of unemployment are sending the real percentages to terrifying highs. In the case of Spain and Greece real unemployment hovers freely between 30% and 40%, unthinkable rates only a few years ago. Even at their worst moments, during the past forty years, those countries had never experienced such a destruction.

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However, you are not subtracting the number of people who actually work and have a job but don’t pay tax or the prohibitively high National Insurance. There are estimates that this could account for as much as 20% of the GDP of Spain.

If you take this sector of the population into consideration, the unemployment figures in Spain could actually be lower than 10%.